Retail sector offers good news for third-quarter economic growth
Retail trade sales rose faster than expected in September, notching up their sixth month of year-on-year increases and posting a quarterly gain of 1.4%
In good news for third quarter economic growth, the retail sector did better than expected in September.
Retail trade sales increased 5.4% in September from a year earlier, to R74.12bn, Statistics SA said on Wednesday. They were up 1.4% in the third quarter from the second.
The retail sector is an important indicator of consumer spending, a key driver of growth in the economy.
Retail trade sales have registered year-on-year gains for the past six months.
Seasonally adjusted retail trade sales increased by 0.7% in September from August, following a month-on-month increase of 2.4% in August 2017 and a 0.7% fall in July.
FNB economist Mamello Matikinca had expected a slight moderation in September’s year-on-year growth, but said: "A combination of a modest interest rate cut combined with a more benign inflation profile and aggressive product discounts should continue to provide momentum to the consumption sector in the new year."
Investec chief economist Annabel Bishop expected retail sales growth to moderate to 4.5% year on year, from the previous month’s 5.5%, while macroeconomics website Trading Economics forecasted growth of 4.2%.
The biggest contributions came from the "other" retailers category, which contributed 2.1 percentage points; general dealers, at 1.5 percentage points; and retailers in textiles, clothing, footwear and leather goods, which contributed 1.3 percentage points.